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laiz [17]
2 years ago
5

Assume that the required reserve ratio is 20 percent. If the Federal Reserve buys $80 million in government securities from comm

ercial banks, then the money supply will immediately Multiple Choice increase by $0 with this transaction, and the maximum money-lending potential of the commercial banking system will increase by $400 million. increase by $0 with this transaction, but the maximum money-lending potential of the commercial banking system will increase by $320 million. increase by $80 million with this transaction, and the maximum money-lending potential of the commercial banking system will increase by another $400 million. increase by $80 million with this transaction, and the maximum money-lending potential of the commercial banking system will increase by another $320 million.
Business
1 answer:
Anni [7]2 years ago
5 0

Answer: increase by $80 million, and the maximum money-lending potential of the commercial banking system will increase by $400 million

Explanation:

Based on the information given in the question, the money multiplier will be calculated thus:

Money multiplier = 1/Required reserve ratio

where,

Required reserve ratio = 20%

Money Multiplier will now be:

= 1/0.20

= 5

Therefore, the maximum money-lending potential will be:

= $80 million × 5

= $400 million

Therefore, the money supply will by $80 million, and the maximum money-lending potential of the commercial banking system will increase by $400 million

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Consider the following information: State of Economy Probability of State of Economy Portfolio Return If State Occurs Recession
mr Goodwill [35]

20.94% is the expected rate of return

<u>Explanation:</u>

<u>The following formula is to be used for the expected rate of return </u>

Expected rate of return = Sum of probability multiply with rate of return

=(0.22 * .16)+(.47 * .12)+(.31 * .38)  

= 0.2094

= 20.94%

The expected rate of return means such return which an investor expects from the amount that has been invested by him into the business organization. It is significant to calculate the rate of return in order to find out the viability of a company.

7 0
3 years ago
If trade between nations is prohibited, a. nations will be unable to specialize in what they are good at and therefore end up co
Strike441 [17]

Answer:

a. nations will be unable to specialize in what they are good at and therefore end up consuming less

Explanation:

There is no country that can produce all goods and services efficiently (at the least cost ). It is for this reason that trade between countries becomes necessary. Trade between countries gives countries the opportunity to concentrate on the production of goods in which it is efficient in production and purchase goods for which it produces at higher costs.

If trade between nations is prohibited, countries would have to produce goods that they are both efficient and ijefficient in their production, resources would be wasted, specialisation in the production of goods would not occur and consumption would fall.

I hope my answer helps you

5 0
3 years ago
Materials purchased on account during the month amounted to $180,000. Materials requisitioned and placed in production totaled $
Alika [10]

Answer:

Part a. Record the transaction on the day the materials were bought.

Materials Account $180,000 (debit)

Cash $180,000 (credit)

Part b. Record the transaction on the day the materials were requisitioned

Work In Progress $165,000 (debit)

Materials Account $165,000 (credit)

Explanation:

Part a. Record the transaction on the day the materials were bought.

Recognise the Assets of Materials Purchased and Derecognise Cash to depict ouflow of economic benefits

Part b. Record the transaction on the day the materials were requisitioned

De-recognise the Materials applied in Production Process and Recognise the cost in Work In Progress Account

6 0
2 years ago
What is compounding interest?
Svetlanka [38]

Answer:

d

Explanation:

the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

4 0
2 years ago
Blank is a checking that is dishonored because of insufficient funds
alisha [4.7K]
<span> bank account where the depositor can write </span>checks<span>. A bank account where money is stored and returns a low interest rate. The same thing as a </span>checking<span> account. ...</span>Blank is a check that is dishonored because of insufficient funds<span>.</span>
7 0
3 years ago
Read 2 more answers
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